CSEET · Business Laws and Management · Elements of Law of Contracts
Asha and Bharat make a contract believing, wrongly, that a certain debt is barred by the Indian Law of Limitation. Which statement is correct?
The contract is not voidable. The parties erred about the Indian Law of Limitation, which is a law in force in India, and Section 21 provides that a mistake as to such law does not make a contract voidable, as its illustration shows.
- AThe contract is void because both parties were mistaken
- BThe contract is voidable at Asha's option
- CThe contract is not voidableCorrect
- DThe contract is void because the mistake concerns a fact essential to it
Explanation
The belief concerns a law in force in India, namely the law of limitation. Under Section 21 and its illustration, such a contract is not voidable. Treating it as a mutual mistake of fact under Section 20 is wrong because this is a mistake of law.
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